Digital ad rates fall for the first time in six months as ad techs struggle to cope with disruption
- by admin
Digital ad revenue, once one of the strongest growth drivers for the ad tech industry, has been slipping for the last six months, with advertisers struggling to pay for ad campaigns.
Digital ad rates fell for the year-to-date by 4.5%, according to research firm eMarketer, and eMarketers research director Daniel Cieslak said the drop is partly driven by ad tech companies’ inability to keep up with the pace of innovation and technological changes.
“It’s really a matter of not just technological changes but the way we pay for it,” he said.
“Advertisers need to look at their own processes and their own business model.”
The decline in digital ad revenue is driven by the impact of the internet, the rise of mobile apps and more diverse audiences.
Ad techs and publishers have struggled to find the right mix of advertising revenue streams to keep pace with demand for their products and services.
“As a result, they’re not getting enough revenue from the traditional ad-based revenue streams,” Ciesllak said.
Advertiser groups say ad tech firms are still working to keep ad rates up to match the demand from advertisers.
“We’re going to continue to invest in the ad technology that we need to,” said Josh Miller, senior vice president of digital advertising at ad tech giant Google.
A growing number of ad tech startups have struggled as a result of the downturn.
Ad techs have been trying to catch up with their digital competitors by offering their ad products in new and more compelling ways.
The rise of social media has also led to the emergence of new ad formats, such as video and mobile.
Ad tech companies have struggled over the last year to keep the ad revenue streams they offered up in line with the ever-increasing volume of digital ads, and as a consequence have been spending less on technology and more time and money on research and development.
The rise of Snapchat has also meant ad tech businesses have been losing their grip on the ad business.
Apple has announced it will be cutting ad tech staff by a third by the end of 2019.
Analysts have said the companies lack of cash to fund the expansion of their advertising businesses has also put pressure on them to continue investing in their digital businesses.
“The ad tech market is becoming more fragmented,” said Cieskalak.
“Ad tech is being a smaller part of a larger market.”
Digital ad revenue, once one of the strongest growth drivers for the ad tech industry, has been slipping for the…